John Hutton: I have seen the report to which the hon. Gentleman referred. It is an important issue; about40 per cent. of people claiming incapacity benefit cite mental health as the reason for being unable to work. Pathways to work, as it is at present, will successfully address that issue. Conditioned management support is one way through the issue, but we stand ready to work with the private and voluntary sectors, and other parts of the public sector, to make sure that the reforms are a success for people with mental illness.

Philip Hammond: The Minister shakes his head, but the Chairman of the Home Affairs Committee certainly understood that to be the case. Let me ask him another question. In 2001, shortly after the Grabiner report, Jeff Rooker, the then social security Minister, said in Standing Committee in 2001 that techniques developed in the Balham project
	"of in-depth analysis and more systematic questioning about NINOs are being rolled out across the country, virtually as we speak"—[ Official Report, Standing Committee A, 9 April 2001;c. 74.]
	Bearing in mind that commitment, will the Minister confirm that the amount of time allocated for interviews with national insurance number applicants has been cut from one hour to 45 minutes, and that interviewers have been instructed to accept photocopies of passports and other documents, instead of the originals? Despite the message from the Balham project, Lord Grabiner's warnings, and Jeff Rooker's commitment to the House, the Government have continued to weaken controls over the issue of national insurance numbers to foreign nationals.

James Plaskitt: As my right hon. Friend the Secretary of State has already said, the overall performance of the agency is still not acceptable. However, there have been improvements in some areas. The agency's operational improvement plan, published in February, set out the immediate priorities for improvements in client services and enforcement. Also, as we have already announced,Sir David Henshaw has been asked to report on his proposals for a redesign of child support policy and delivery before the summer recess.

Philip Hollobone: May I draw the Minister's attention to illegal immigration in Kettering and the problem of legal migrants being subject to illegal terms and conditions of employment? Responsibility for those issues appears to fall somewhere between IND, the Paymaster General and the Department. Is the Minister satisfied that there is effective Government co-ordination between all three Departments on those matters?

James Plaskitt: There is some sharing of responsibility. However, the Conservative Government's legislation—the Asylum and Immigration Act 1996—placed considerable responsibility on employers to establish whether people applying for a job had a right to work in the United Kingdom. We strengthened that legislation in 2004and we also implemented the Grabiner report's recommendations. The system is therefore far more robust now than the one we inherited. We recently announced a further improvement.

David Heath: I wish to make exactly the same point. I am unclear as to why the expression
	"he is expected to safeguard"
	should replace a clear reference to a fiduciary duty. The question that all Members wish to ask is: who isthe "he" who is expected to provide the safeguard? Isit the man on the Clapham omnibus, or the judge; or will the terms of contract provide the safeguard? What does the expression "expected to safeguard" mean? We will clearly need to explore that issue in Committee, but if the Solicitor-General can help us to understand it now, that would be to the advantage of us all.

Mike O'Brien: There is some overlap and I say again that it would depend on the circumstances between the two friends undertaking the financialdeal that my hon. Friend the Member for Rhondda (Chris Bryant) described.
	Fraud by abuse of position improves upon the current law, because it may be problematic under the current law to show that a victim has been deceived in circumstances where the defendant occupies a position of trust. In proposing the new offence, the Law Commission recommended that it should be an offence of fraud only if the abuse of position is both dishonest and secret. However, again after considering the arguments put forward during the consultation in 2004, the Government decided not make secrecy an essential part of the offence. We took that view because secrecy is difficult to define and would represent an unnecessary complication, which could lead to technical arguments in court. Moreover, conduct that is not secret is not any the less reprehensible and thus should come within the ambit of clause 4.
	The Fraud Bill also creates some offences designed to complement the new general offence.

Mike O'Brien: It is certainly right that some of the developments in the global economy that have so benefited our economy have also benefited a lot of fraudsters, who operate in Europe and globally. We now see frauds committed by a group on one continent against victims on another, especially by use of the internet. We are now developing relationships between the various prosecutors and Governments to build up new mechanisms, such as the one that my hon. Friend described, that will enable law enforcement agencies to keep abreast of the changes that the global economy is bringing. I hope that those mechanisms will enable us to get ahead of the fraudsters. My hon. Friend is not only well informed but right about the importance of developments in the EU, especially the European arrest warrants.
	Some of the other changes in the Bill were recommended by the Law Commission, but others were not. Clause 11 was recommended by the commission and creates a new offence of "obtaining services dishonestly". It is probably the most important other provision in the Bill, and the offence will have a maximum penalty of five years on indictment. It will replace section 1 of the TheftAct 1978 and will fill a gap in the existing law. At present, it is questionable what crime is committed by a person who dishonestly obtains services from a machine. Under current law, the problem is not only that fraud must involve deception, but that services cannot be stolen.

Mike O'Brien: Let me give a reassurance to conjurors throughout the land that, provided that they are not intending to get involved in burglary, theft or cheats or anything else of a similar nature, they should be all right. Let them continue with their tricks.
	The aim of the Bill is to ensure that we get particular individuals who are seeking to go equipped, and may be equipped in their home, and to ensure that—

Mike O'Brien: May I make it clear thatclause 6 does not go too wide, in my view? It does not introduce a strict liability offence in any way. Its wording draws on the wording of section 25 of the 1968 Act in order to attract the case law that goes with that section—notably the case of Ellames, which is referred to inthe explanatory notes and which established that the prosecution have to prove a general intention that the article will be used by the possessor, or by someone else, for a fraudulent purpose. We are not dealing with a strict liability offence for which members of the Magic Circle or ordinary honest citizens are going to be caught.

David Heath: I concur, and, as one of the rare breed of council tax payers in the City of London, I am glad that it is not solely my contribution that enables them to do their job on behalf of the wider community. I have thought for a long time that we need a single, all-embracing anti-fraud organisation, with much better internal connections, to provide better investigations in parts of the country that are not currently well served. I hope that that will form part of the conclusions of the review that the Solicitor-General mentioned.
	Even when we have successful investigations, we still have problems with the management of fraud cases. The over-simplistic view sometimes expressed on behalf of the Government that that is somehow the result of juries who cannot cope with the amount of information and the time scale of cases is unsupported by evidence. We must be clear about that. If we want an instructive case study, we need look only at the Enron trial in Houston. It was the fraud case of the century—a huge case, with huge ramifications. It did not lack for evidence, because it took evidence from 56 witnesses, but those responsible managed to conclude the trial in 15 weeks. The jury had nearly six days of deliberation and found the defendants guilty as charged. If that is possible before a Texas jury and a Texas judge, it is not beyond the wit of UK juries and UK judges to effect similar management. In contrast, the BCCI litigation—although it was a misfeasance trial, not a fraud trial—took more than two years, and cost more than £100 million in legal bills. The two opening speeches alone took 200 days of court time, only for the action to be abandoned, with all that work proving abortive. That is an effective comparison of the effectiveness of trial procedures and the Lord Chancellor—as he is at the moment—the Attorney-General and the Solicitor-General need to consider the issue carefully to see how we can make improvements.
	Like the hon. Member for Beaconsfield, I hope that we will hear no more of the implementation of section 43 of the Criminal Justice Act 2003. I think that we have had an assurance from the Attorney-General that if the Government take the view that they need to restrict jury trial further—which I would oppose with every fibre of my being—he will do so by means of new primary legislation. If that is the case, he will no doubt support the amendment that I intend to table in the course of proceedings on the Bill to repeal that section as entirely otiose. We shall then have proof of the Government's intentions.
	I shall mention several issues that I hope to address further in Committee. We had a short debate onclause 4, which states:
	"A person is in breach of this section if he...occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person".
	I was not entirely persuaded by what the Solicitor-General said about that provision. He seemed to be saying that he actually means "the person occupies a position in which he has a duty"—wording that seems entirely appropriate. However, the wording "he is expected to" opens the provision to all sorts of challenge, which is entirely unnecessary because there is no suggestion that there is an additional general duty on an individual citizen. I think that is what the hon. and learned Gentleman said, so it is something that we could usefully consider in Committee.

David Heath: That is extremely helpful. It is clearly not on the face of the Bill. I do not think that we can assume, but the Minister has gone a long way to helping us to assume in a way that the courts will recognise. I am grateful to him for that.
	I welcome the new provisions for fraudulent business carried on by sole traders. An area that I would like to explore in Committee and perhaps at later stages is where actions are taken in anticipation of receivership or bankruptcy. I perceive that there are many instances where people carry out actions that have the long-term effect of defrauding creditors or employees of a company in the expectation of a company ceasing to trade or in anticipation of that happening. My belief is that that is fraudulent. My belief also is that there can be a deliberate intention to remove assets from a company prior to it ceasing to trade, in a way that is intended to prevent genuine creditors, including the employees of the company, from getting their proper recompense. That is not adequately covered, and is certainly not adequately prosecuted at present. I would wish to explore that.
	We have already dealt with clause 11, which is the replacement of part of the Theft Act 1968. I made an intervention about downloading. I do not defend those who illegally download music. Equally, there have been occasions when large corporations have been extremely heavy-handed in either threatening to or carrying out legal action, particularly against minors who have perhaps unwittingly committed an offence. If the clause can be used to launch a private prosecution of a 12-year-old with a computer who is downloading songs off the internet, with mum and dad having no idea that that is happening, that worries me. Perhaps we shall receive some reassurance about that at a later stage.
	We need a slightly more specific definition of the related offences on non-incrimination. Under clause 13 there is a requirement that a person is not to be excused from answering questions on matters relating to an offence under the Bill or a related offence. We need to know what the related offences are, rather than have an open-ended commitment at that point.
	Lastly, in terms of what is in the Bill, there is the extent. I know that there has been an issue about whether we should assume extraterritorial jurisdiction in the Bill. The Government have broadly decided that they should not do so. However, the extent to which extraterritorial jurisdiction is appropriate in relation to some of the offences is still an open question. Certainly, internet crime is a real issue, as the Solicitor-General well knows. There is also an issue with unsolicited mail—something that bedevils an awful lot of our constituents. Often it originates from abroad and constitutes what I would consider a fraud on the recipient. When someone receives what purports to be a demand for money, which may have a fraudulent intent, we shall need to be careful about the point at which that becomes prosecutable and in what jurisdiction.
	May I conclude with what is not in the Bill? The major issue, of course, is the fact that the Bill does not repeal the common law offence of conspiracy to defraud. The hon. Member for Beaconsfield (Mr. Grieve) said that the Law Commission was fairly explicit. It could not have been more explicit. Its report refers to
	"the indefensible anomaly represented by the continuing survival of conspiracy to defraud".
	It is an indefensible anomaly that the Solicitor-General now finds himself in a position to defend. I am not convinced by the arguments. They are based on the existing law of fraud, rather than the law as it will be following the Bill's enactment, and the existing law on multiple offences, rather than the position that will be the case after the rather belated implementation of provisions on multiple offences in the Domestic Violence, Crime and Victims Act 2004
	The offence is a catch-all offence, which, if there are adequate alternatives, I find repellent in itself. The offence provides an easy route for dual criminality, which is becoming more and more of an issue in extradition proceedings, given that almost anything that is a lawful activity on behalf of one or more people might be interpreted as a conspiracy to defraud and might therefore provide that dual criminality to enable extradition. We need to look at this matter again, both in Committee and probably on Report. In the interim, I ask the Solicitor-General seriously to consider why it would not be appropriate to have a repeal provision in the Bill with a later commencement date or a commitment involving, in effect, a sunset clause for that particular provision, which could be reversed by Order in Council. There are ways of providing the primary legislative framework for the repeal of the existing offence, which we can do by virtue of the Bill and still have the precautionary approach that the Solicitor-General advises. The advice to prosecuting authorities needs to be extremely robust when it comes to why they should not use the conspiracy to defraud. I would like a commitment from the Solicitor-General, if he can give it, that he would be prepared to use noli prosequi powers to prevent a prosecution on that basis if he believes that there are other more appropriate offences as a result of the Bill that should be used as an alternative.
	There are other matters that could have been placed to advantage in the Bill. We do not have that many Bills working in this broad area. I would have liked the Bill to be not just the Fraud Bill, but the fraud and corruption Bill. It is a perfect Bill for the incorporation of the provisions of the Corruption Bill that is before the House in the name of the hon. Member for City of York (Hugh Bayley). Many people feel that that is an essential part of our armoury against corruption on a wider scale and fulfils the expectations on this country by treaty to provide better anti-corruption legislation. It is consistent to join fraud and corruption, as there is a considerable overlap between the two, and the Bill is an appropriate vehicle to do so.
	Some things that could be construed as fraud or corruption are not investigated or prosecuted. It is perhaps over-fashionable to talk about association football, but it is inappropriate for bung allegations to be investigated by the Football Association and other sporting bodies. They should, at least on a prima facie basis, be investigated by the police and other investigating authorities, and I am surprised that no such investigation has taken place on the basis of the evidence that has been made public.
	Finally, does the Solicitor-General think that anything could be included in the Bill so we can deal more effectively with carousel fraud, which has become an extraordinarily serious issue? A report on figures recently released by the Office for National Statistics in the past few days says:
	"Criminal gangs are cheating the taxman out of VAT on £1 in every £7 of Britain's trade with Europe."
	That is a staggering figure—14 per cent. of all Britain's imports and exports are subject to carousel fraud, yet we have been unsuccessful in achieving effective prosecutions and indictments. If we can do anything to make such fraud easier to investigate, to bring charges and to secure convictions, we should use the Bill to do so, as it is an appropriate legislative vehicle. I invite the Solicitor-General to consider whether that is possible.
	On the whole, this is a good Bill. We wish to explore some issues in Committee and on Report, but we certainly support its passage and hope to improve it along the way.

Elfyn Llwyd: I think that I agree with the hon. Gentleman. A period of three years has been mentioned and that is ample time in which to ascertain whether to get rid of the offence. I stress that I do not violently disagree with the hon. Member for Beaconsfield, who supports a sunset clause. We all want the same thing—it is a question of how we get there.
	I shall be relatively succinct because others wish to speak and we are holding a Second Reading debate, which does not call for going into the minutiae. The hon. Member for Beaconsfield referred to the definition of "gain" and "loss". Some people believe that it is too broad. We shall have to revert to the matter in Committee and I am sure that we will hold an interesting discourse on it.
	I am worried about clause 6. I intervened on the Solicitor-General to point out that it requires no mens rea element and that it should do so. A few moments ago, he responded to the hon. Member for Somerton and Frome (Mr. Heath), who made the same point, by saying that intention will be necessary for a successful prosecution. That poses the question of why "knowing" or "intending" is not included in the provision. If it were, I would not have raised the matter and I am sure that many other learned commentators would not have raised it. Is the Solicitor-General open to an amendment along those lines in Committee? He was adamant that intention was required. In opening the debate, he said that there was some sort of tie-up between the old offence of "going equipped" and the clause. I tried to make the point that they are different because, if a person, late at night, is carrying bolt cutters, jemmies and all the typical gear of a housebreaker, that is one thing, but there is also the high-tech stuff—PINs, cards and so on—that is not perceived as being there specifically for a dishonest or nefarious purpose. There is therefore a distinction, which bolsters the case for including some sort of mens rea element—either "knowing" or "intending"—in the provision. It is necessary to have a serious debate about that.

Elfyn Llwyd: No, I have not, or, if I have, so has Justice.
	Clause 6 deals with the possession of articles. The Solicitor-General has gone considerably further today than was the case in the other place, in saying that there would have to be an intention. He very fairly intervened on the hon. Member for Somerton and Frome on the point. I hope that it will be possible to advance this part of the Bill, to make it clearer and safer.
	Clause 11 deals with obtaining services dishonestly. That new offence is necessary because of the way in which things have moved on since the Theft Acts 1968 and 1978. We are now living in an electronic age and it is important to look with clarity at such offences.We need to consider the words "dishonest act" in clause 11(1)(a). Should there be a specific mens rea requirement in regard to a defendant dishonestly obtaining services in breach of subsection 2? That is undoubtedly what the clause intends, but it could be argued that, under the present wording, such an act would be intrinsically dishonest, so there would be no need for a finding that the person was dishonest. A better interpretation would be to insert a mens rea element to avoid any difficulty.
	The Bill is overdue, and it is welcome. I believe that the House will agree to the Government's proposals in large part. However, caveats have been added by several hon. Members, and I join them in expressing my discomfort about some of the offences that lie between involving strict liability and being an ordinary form of offence. Obviously, we need to ensure that it is absolutely clear that we are setting up legislation that is designed to catch dishonest people. However, it is not utterly clear in some parts of the Bill that that will be the way that it will work. Despite those few misgivings and caveats, I welcome this important Bill. In relation to a remark made earlier by the hon. Member for Rhondda, it has not been standing room only here today, but the Bill is important to all our clients—[Hon. Members: "Clients?"] I meant to say "constituents". The Bill is important for all our constituents, especially those who might be affected by fraud, but also those who might be tempted to perpetrate an act of fraud.
	We in this House think that we always legislate sensibly and that we always get things right. I remind hon. Members that there was a mistake in the Theft Act 1968 as a result of some draftsman forgetting to repeal the provision that a person caught stealing a sheep could be hanged. Let me tell you that, in some parts of Wales, that has caused a great deal of difficulty.

Edward Garnier: I am delighted that someone such as my hon. Friend the Member for Broxbourne (Mr. Walker) has found this afternoon's debate such an enjoyable occasion, because, as he knows, the Government are here to provide us with pleasure, and they have, in fact, done it 53 times since 1997. This is, I think, the 53rd Bill that they have introduced to do with the criminal justice aspect of criminal policy. Probably, on this 53rd occasion, this is the one Bill that I can more or less wholeheartedly welcome, so long as they implement it.
	I have tabled a number of parliamentary questions to the Home Secretary—this one, the last one and the one before that—to ask which Bills have been brought into force, which of their provisions have been repealed before they came into force, which have been repealed since coming into force and which are yet to come into force, and it is quite amazing how one gets back a telephone bill of an answer, too big to be e-mailed by the relevant Home Office department, to show how active the Government have been in producing legislation, but how dilatory and, indeed, how repetitive they are in the work that they do in bringing it into force. So they are a Government who chase headlines, but thanks to the Law Commission—on behalf of the official Opposition, I send my thanks to the Law Commission—here at least we have a Bill that looks pretty good.
	I also thank the Joint Committee on Human Rights for producing its 14th report, which deals in part with the Bill, and there is some good reading to be had in there, not least because it points out some of the concerns that the Government ought to have—I am sure that the Solicitor-General has them—about aspects of the European convention on human rights and the way in which it bites on the Bill, particularly in relation to articles 5 and 7.
	A number of hon. Members have expressed our interest and support for the continuance of jury trial. My hon. Friend the Member for Beaconsfield(Mr. Grieve) and the hon. Members for Somerton and Frome (Mr. Heath) and for Meirionnydd Nant Conwy (Mr. Llwyd) and others have all expressed views in support of jury trial and quite sensibly stated that the problem with some of the more difficult fraud trials is not the jury's participation but the case management and the way in which the prosecution case has been presented to the jury.
	As my hon. Friend the Member for Beaconsfield pointed out, very often those cases have fallen apart well before they get to a jury. Certainly, if there was much space in Government's armoury for arguments against the use of juries in fraud trials, that space has been utterly emptied by the production of the Bill, which is, no doubt, intended to simplify and clarify the criminal law in relation to dishonesty. I trust that the Government will be extremely slow to introduce not only another criminal justice Bill, but a Bill to implement section 43 of the Criminal Justice Act 2003, to abolish juries.
	As my hon. Friend and I have said, we broadly welcome the Bill and are prepared to allow the Government the three-year period to consider the aspects of it that have been discussed in the other place and in the House in relation to the common law offence of conspiracy to defraud. However, I remind the Government of what my noble Friend Lord Kingsland reminded the Attorney-General of on 29 March, when the Bill was read for the Third time in the other place. I quote his remarks as recorded in the Lords  Hansard:
	"The Attorney-General has helpfully summarised in paragraph 8 of his draft advice the judgment of the noble and learned Lord, Lord Bingham, the then Lord Chief Justice, in the joined casesR v Rimmington and R v Goldstein. The latter part of the portion of the judgment which appears in paragraph 8 reads,
	'good practice and respect for the primacy of statute do in my judgment require that conduct falling within the terms of a specific statutory provision should be prosecuted under that provision unless there is a good reason for doing otherwise'."—[ Official Report, House of Lords, 29 March 2006; Vol. 680,c. 779.]
	In essence, what other hon. Members and I are asking for is that there should be clarity and certainty in the criminal law. The Solicitor-General and I are familiar with the expression "the certainty of indictment", and that rubric should flow across into statute law, just as much as it does in the drafting of a criminal indictment. Although we are happy to give the Government that three-year extension while they consider the common law conspiracy offence, it is something that ought not just be let to run. Whether there is sunset clause or some other device, it is not something that the Government should allow just to roll off into the long grass.
	What we are essentially talking about is dishonesty—a concept that is often easy to recognise and sometimes a lot more difficult to define. Definitions are important in all statutes, but particularly in criminal law statutes and certainly in the Bill. By and large, the definitions in the Bill are sufficiently clear and the sort of thing that a judge—I declare an interest as a Crown court recorder and as someone who practices as a barrister not at the criminal Bar but at the civil Bar—can easily explain to a jury at the end of a trial.
	We must bear in mind the fact that some areas of definition will need to be teased out. My hon. Friend the Member for Beaconsfield ran through those relating to the expressions "loss" or "gain" in clauses 3 and 5. More importantly, that relating to the word "expected" in clause 4(1)(a) has far-reaching implications that require careful thought. Issues relating to duty flow from that. My hon. Friend and the Solicitor-General had a private debate earlier about fiduciary duty. Speaking as a defamation specialist, when one talks about qualified privilege, one often talks about the duty to pass on a defamatory allegation even though one might know that it is defamatory and might be damaging. That duty can be described as either legal, moral or social. Therefore the fiduciary duty about which my hon. Friend and the Solicitor-General were talking might not be the only sort of duty caught by an expression such as "expected".
	I therefore urge the Government to think carefully in Committee about what they mean, what they want the courts to mean, and what they think the police and prosecuting authorities ought to be doing when faced with a case that might fall under clause 4, entitled "Fraud by abuse of position". As I said, there is a clear need for certainty in the criminal law, and as long as that is provided by the time the Bill leaves this House, either to go back to the other place or to get Royal Assent, none of us should complain.
	I want to say one or two more things about clause 4, as that, in conjunction with the problems described in relation to clauses 6 and 7 on criminal intent, is where most of the difficulty with the Bill will lie. The hon. Member for Meirionnydd Nant Conwy had great fun with his Liberty briefing on A, M and—

Edward Garnier: The hon. Gentleman says, "Certainly not", from a sedentary position, in case anyone did not hear him. He also made sensible points about case management, and gave his support for the jury system. From my experience of summing up to juries, and of addressing juries as an advocate, they have a collective common sense, by and large, and are exceptionally good at discerning honesty and dishonesty. When considering cases of criminal fraud, one is essentially talking about dishonest behaviour. There is no better way of unravelling all the complicated inter-weavings of a scam and asking whether what was going on was a deliberate piece of dishonesty than to ask a group of 2 people to apply their collective common sense.
	I will not detain the House now with a dissertation on fraudulent preference, on which the hon. Member for Somerton and Frome touched briefly, but there is a story to be told in that regard, as there is with regard to carousel fraud, which has lately hit the headlines. I am sure that the Government have both those matters fully in mind, and I am sure that he can raise them again in Committee.
	One point on which the hon. Member for Somerton and Frome lighted on which others did not, and which is worth highlighting now, is that of evidence on self-incrimination in relation to clause 13. I will have to read clause 13 a few more times before I get my head around it completely, but as I understand it, the self-incrimination concerned relates to questions asked in civil proceedings, which might prevent a prosecutor from using the answers to those questions to mount a criminal prosecution. The Solicitor-General, or my hon. Friend the shadow Attorney-General, will no doubt take me into a cooler room and explain things to me gently.
	I would be interested to hear from the Government, now or subsequently, either orally or in writing, how that clause impacts on what is loosely called the right to silence, or the denial of the right to silence. As the Solicitor-General will know, prosecutors are entitled in certain circumstances, under the Police and Criminal Evidence Act 1984, to comment on a refusal to answer questions or to explain a particular course of conduct, at the roadside, on arrest or later while being interviewed by the police—or, indeed, on a refusal to give evidence in a trial. I should like to know for my own purposes what impact clause 13 will have on that aspect of criminal procedure. As I have said, the Minister need not trouble himself to give me an answer this evening, but I should be grateful if a simple written answer could be prepared.
	My hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) described himself, rather diffidently, as a non-practising barrister, as though he had very little experience of the intricacies of criminal law. On the contrary, he is a highly experienced senior junior at the criminal bar. It is a pity that he has had to give that up for his parliamentary duties from the point of view of the courts in England and Wales, but it is a great benefit to the House. He too expressed support for the jury system. He too sensibly advised us that the Government should not just consider legislation on fraud, but consider ways of making things less complicated. He rightly said that the more complicated the system—he cited the tax credits system—the easier it would be for bad people to cheat. He too raised the issue of the maximum sentence in clause 11, which I think it is sensible to deal with in Committee.
	The hon. Member for Rhondda (Chris Bryant) took a zoological canter through the Bill—if it is possible to take a zoological canter; perhaps not. He talked of phishing, Trojan horses and money mules. Essentially, his point was that fraud is an international crime which can be perpetrated by three separate people from three separate jurisdictions, and which can have an impact on a victim in this jurisdiction. It may well be that international co-operation of one kind or another outside the confines of the Bill is necessary to help reduce fraud. The hon. Gentleman was sceptical about the need to retain the common law conspiracy offence, although I think he properly recognised that it might be necessary to retain it in order to establish the most appropriate way of dealing with phishing, Trojan horses and money mules. No doubt the Government will consider that over the next three years.
	The hon. Member for Meirionnydd Nant Conwy applied his legal experience to the Bill. He seemed less sure than Conservative Members about the need to abolish the common law conspiracy offence—not necessarily for the same reasons as the hon. Member for Rhondda—but I am happy to say that he was wholly with us on jury trial, on the need for tighter definitions, on the need for clarity in relation to mens rea or criminal intent in clauses 6 and 7, and on the wider and more general plea for clarity and certainty in the criminal law.
	Let me say something about clauses 6 and 7. I understand the concern expressed by my hon. Friend the Member for Beaconsfield, and understand and support the simple solution that he proposed in relation to clause 7. I may be able to assist the Government in that regard, although no doubt my hon. Friend will explain his ideas better in Committee. Simply removing the word "or" from clause 7(1)(a) and substituting the word "and" would do away with all the problems that we may face.
	The Government may ask what constitutes fraud within the confines of the Bill. Fraud is described in clauses 1, 2, 3 and 4. It requires criminal intent. The fraud referred to in clause 7(1)(a) is the fraud described in those earlier clauses. When we combine that with the word "knowing" in the same paragraph, we end up with criminal intent. My hon. Friend's solution is so much neater, simpler and clearer. A stroke of a pen could remove one little word and insert another: end of problem.
	There is a disjunction between the drafting ofclause 7 and the drafting of clause 6, but as my hon. Friend said, what works in clause 7 ought to work in clause 6. If the Committee is to do itself any good—which I am sure it will, given a relatively benign and much welcomed Bill—it should concentrate on those two clauses, while obviously dealing with the difficulties presented by the word "expected" and the relationships issue raised in clause 4.
	That is quite enough from me. I told the Government Whip that I would speak until about 9.30 pm, because I knew that the House was keen to hear from me. I also wanted to ensure that my hon. Friend the Member for Tewkesbury (Mr. Robertson) was given the shortest possible time in which to explain the issues that affected his constituents. Joking apart, however, it is time for me to sit down and shut up—or possibly shut up and sit down.

Vernon Coaker: This is the first occasion on which I have spoken as a Minister in a Second Reading debate. As I am not a lawyer, I rise with a slight degree of apprehension, which is why I was grateful to the hon. and learned Member for Harborough (Mr. Garnier) for saying that I could write to him about clause 13.
	I welcome the broad support that has been expressed for the Bill. I thank the hon. Member for Beaconsfield (Mr. Grieve), the hon. and learned Member for Harborough, the hon. Members for Somerton and Frome (Mr. Heath) and for Meirionnydd Nant Conwy(Mr. Llwyd), and others on both sides of the House for responding constructively, while committing themselves to scrutiny in Committee to produce the better Bill that is our common goal.
	The hon. Member for Beaconsfield outlined three tests that he considered important. It was crucial, he said, to overcome complexity, to help prosecutors to prosecute those who committed the crime of fraud, and to adapt to the changing face of criminality—for example, in the context of new technology. I assure him that the Government agree with him about all those tests and aims. As for repeal of the common law offence of conspiracy to defraud, I repeat that having listened to Lord Justice Rose and following various consultations, we decided not to repeal it but to review it after three years.
	Let me point out to the hon. Member for Beaconsfield that the views expressed in the other place changed during debates on the Bill. The hon. Gentleman said that Lord Lloyd saw no case for retention of the common law conspiracy offence. That may have been his initial view, but on 14 March he said that after speaking to Lord Justice Rose he was "wobbling down in favour" of retaining the offence. Even Lord Lloyd, having listened to some of the arguments, decided to change his view. He wobbled, which is enough for me.
	As has been said, non-jury trials will feature in another Bill and do not form part of this debate, but the points made today have been taken into account. As for clauses 6 and 7 and the mens rea issue, we believe that the requirement for an intention to use the articles in people's possession will provide a safeguard against idiotic prosecutions. As my right hon. and learned Friend the Solicitor-General made clear, those are not strict-liability offences. Case law has established that the phrase
	"for use in the course of...any fraud"
	means that the prosecution must prove at least a general intention of committing a fraud. Anyone who has no such intention has nothing to fear from these provisions. Whether they are conjurors or innocent members of the public, safeguards are provided by case law.
	I thank my hon. Friend the Member for Tamworth (Mr. Jenkins) for what I thought was an important and worthwhile contribution to the debate. He made the point that the Bill is only part of the solution. That is absolutely right. He suggested the need, for example, for specialist fraud judges and perhaps for specialist fraud courts. Those are useful proposals and I assure him that we will put them into the fraud review, which will report shortly.
	My hon. Friend raised a number of issues to do with receiving digital television and no doubt he can argue his points in Committee; I am sure that he looks forward to serving on that. He made the important point, which the hon. Member for Broxbourne(Mr. Walker) also made, that fraud is not a victimless crime.
	My hon. Friend said that there is no definition of dishonesty. Although there is no definition of dishonesty, the established test results from the case of Ghosh. Although that is case law, it is approved by the House of Lords and it has been in use for almost25 years.
	The hon. Member for Somerton and Frome(Mr. Heath) raised many of the issues that we will need to look at in more detail in Committee. With that assurance, I will not mention all the points that he made. For example, we can discuss in Committee the issue of nationality jurisdiction. We do not think that the same justification for extra-territorial jurisdiction exists as it does for corruption. The corruption of officials overseas is dealt with in several international conventions. That stems from concern about corruption in developing countries and its effect on their stability. In contrast, fraud is a huge issue across the world—domestically as much as internationally. Corruption is also far less common than fraud. The resource implications for "policing" UK nationals worldwide for fraud are therefore much larger. The cost would need to be carefully examined before any party committed itself to it. If a UK national commits a fraud in Hong Kong that has no effect in the UK and no part of the fraud was committed in the UK, do we want the SFO to pay to send a team to Hong Kong? A degree of caution is needed with respect to that matter, but, as I say, it is an issue that we can debate in Committee.
	The hon. Member for Rugby and Kenilworth (Jeremy Wright) was right to draw attention to the need for an appropriate penalty for obtaining services dishonestly. In response to his question about the maximum sentence, I draw his attention to the fact that the existing offence of obtaining services by deception carries a maximum sentence of five years' imprisonment. The Law Commission examined that issue and saw no reason why the maximum for the new offence should not be the same. The Government's consultation likewise did not elicit any demand for the creation of a higher maximum sentence. Therefore, the Government concluded on the basis of the Law Commission and the consultations that we undertook that the maximum sentence of five years was appropriate.
	My hon. Friend the Member for Rhondda(Chris Bryant) reminded us, as always, of the importance of people. As others have made clear, it is important continually to make that point. Although some people find the issue of fraud dry and not very interesting, it impacts on thousands of people across the country. Therefore, today's debate is particularly important.
	My hon. Friend made an important point when he talked about the issue of training for the police. I assure him that the police, particularly the ACPO national fraud working group, are playing a full role in developing the policy in the Bill. They have publicly welcomed the Bill and look forward to its early enactment. The City of London police are using their experience to look at how they can train police forces throughout the country in ensuring that it is as effective as possible. Indeed—this will be of interest to the barristers here—the Crown Prosecution Service is also looking forward to issuing advice to prosecutors to ensure that it is as effective as possible.

Vernon Coaker: That is an interesting and important point but it is not one for the law on fraud.
	The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) emphasised the need to ensure that the law is as simple as possible. The Bill will do that—it will help to simplify a range of deception offences. It will help juries and magistrates to deal with what, as he and I know, can be extremely complex matters.
	On the issue of why "knowing or intending" is not included in clause 6, we should bear it in mind that we are building on existing offences and that the "going equipped" offence in the Theft Act 1968 applies not only to burglars but to those who have equipment to commit a fraud, which it describes as a cheat. The only problem with that Act is that it does not apply to fraudsters who operate from home. We already have nearly 40 years' experience of the operation of that provision and we are not aware of any problems of innocent persons being troubled by it.
	The hon. Member for Broxbourne pointed out, in his wide-ranging but interesting speech, that fraud is not a victimless crime. The Bill will help to tackle many of the examples that he gave of victims of fraud.
	We have faced a growing threat from fraud. Tackling it requires effort by all concerned on several fronts and on prevention as well as enforcement. However, modernisation of existing criminal law is one essential building block. The existing statutory offences are specific and overlapping, yet they are not related to each other to convey the variety of fraudulent behaviour in an organised way. That untidiness in the law means that it is not always clear which offence should be charged and defendants have successfully argued that their particular deceptive behaviour did not fit the definition of the offence with which they had been charged.
	Our reform efforts date back to 1998, when the then Home Secretary asked the Law Commission to consider whether a general offence of fraud would improve the criminal law. This is a tricky area of the law and the commission consulted stakeholders and gave the issue the most careful consideration. The 2002 report was the result. It decided that it was not a realistic solution to plug loopholes in fraud law by adding more specific offences, as has been done in the past. Such piecemeal law reform leads not only to further complexities and the potential for charging defendants wrongly, but means that the law will always be lagging behind any development in technology or new methods of committing fraud—a point that the hon. Member for Beaconsfield (Mr. Grieve) made.

Laurence Robertson: I rather regret the need for this debate, but having said that, I am pleased to have secured it and thank the Minister for attending. I want to set out the picture regarding health services in Gloucestershire and seek clarification from the Minister on a number of issues.
	There are three primary care trusts in Gloucestershire and one hospital trust. Cheltenham and Tewkesbury primary care trust, which covers most, but not all, of my constituency, is in surplus, but other trusts have been in deficit. The result is that across the county, there are some £40 million-worth of deficits. All the trusts together are proposing cuts in health services amounting to some £30 million, as things stand.
	There is of course great opposition in Gloucestershire to this proposal. I have a petition with more than 2,200 names on it, which I hope to present it to the House in the next few days. That constitutes a high percentage of the population affected. Indeed, there have been rallies and marches across Gloucestershire. My hon. Friend the Member for Forest of Dean (Mr. Harper), who cannot be here tonight, initiated a debate in the Chamber on 25 May, and he has been very active in opposing the cuts. Indeed, there is united opposition to them throughout the House. Members from the Conservative and Liberal Democrat parties, and from the Government party, will seek to catch your eye to contribute to the debate,Mr. Deputy Speaker, and it might be helpful if I confirm that they have approached me to ask for permission to do so.
	I should say at the outset that we of course have no disagreement with organisations balancing their books; every organisation must do that. Also, no one is going to accuse the Government of having cut spending on the health service, as that is not the case, so I hope that the Minister will not defend the Government against charges that I am not going to make.
	I turn first to my main, particular and most immediate concern—I shall come on to others shortly—which is the proposal to close Winchcombe hospital. It was built in 1928, with a lot of the funding provided by local people and benefactors. It provides a caring and comfortable convalescence for people, especially older people, recovering from operations or other treatment. It also provides a very helpful minor injuries unit in a rural area where public transport is not particularly useful.
	The White Paper on community hospitals issued some while ago made it clear that community hospitals should not close
	"in response to short-term budgetary pressures."
	Sensibly, it recognised the value of, and need for, such hospitals—as, indeed, do I. I was recently treated at Tewkesbury community hospital within five minutes of having had a rather nasty car accident. The staff were excellent, and I pay tribute to them, and place on the record my thanks to them. The alternative to that treatment would have been a long car journey and delayed treatment, thereby putting additional pressure on staff at, say, Cheltenham or Gloucester hospital. So although the White Paper opposes such closures, that is exactly what is being proposed in Gloucestershire.
	People in Winchcombe are united in total opposition to the proposed closure of their hospital; they value it and they need its services. If it closes, they, too, will have to go to Cheltenham or Gloucester for immediate treatment, and those who are currently being treated or operated on in one of those hospitals will, presumably, have to be sent home early if Winchcombe hospital closes.
	I acknowledge that there is a debate going on about how long people should stay in hospital, and I accept that nowadays, some people can go home earlier than they might have done in the past. Often, home is the best place for people to recover, but not always. A while ago, my daughter was sent home from hospital after a major operation the very next day, even though she had no one to look after her and had two children to look after herself. That is unacceptable these days, but if we close hospitals and reduce bed numbers, it will become common practice, which I would greatly regret.
	Have the people who make these decisions considered the knock-on costs—to social services, for example? Have they calculated when people need help at home? In the light of meetings that I and others have had with Gloucestershire county council, which would have to provide many such services, it appears that those knock-on services have not been costed. According to the local primary care trust, they have not been costed. Its director of finance said today, when asked about the future alternative proposals:
	"we have not calculated detailed costs yet."
	How does it know that the books will balance even after the cuts have been made, if those cuts have not been thoroughly thought through or properly costed? What that director did confirm was that closing the hospital will save only an estimated £240,000 a year. How can that be right? How can that make financial, let alone clinical, sense?
	I am also concerned by the lack of joined-up thinking about the knock-on costs, and generally. For example, just recently the doctor's surgery in Winchcombe closed, and it was proposed that another one be built outside the centre. Why was no consideration given to moving the surgery to the hospital, and expanding the services available there instead of cutting them? The surgery would have remained in the centre of the town, where many old people live, and there would have been no need to build another one.
	If the hospital is not needed, why are local health chiefs considering buying in several beds, for the very purpose of convalescence? We already have 22 beds at Winchcombe hospital, so why lose them and buy in beds from elsewhere? I totally oppose the proposal to close the hospital, but other cuts across the county also worry me.
	For example, Delancey hospital, which is just outside my constituency and in that of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), is also proposed for closure, but it provides a good service.St. Paul's maternity wing in Cheltenham general hospital was opened just 10 years ago at a cost of £6 million, and that is proposed for closure. The overnight facilities at Battledown children's ward, also in Cheltenham hospital, will be closed, and other hospitals in neighbouring constituencies are closing. Mental health units are being proposed for closure, and further cuts are being "considered", but are not confirmed yet.
	All that represents short-term thinking. Where will it end? The proposed closure of those and other services is extremely worrying. Why are we having those cuts at all, and whose fault are they? People are taking a stand not only because of the present proposals, but the further ones that they fear. We are not a third world country—we are supposed to be the fourth largest economy in the world—so why do we face those cuts? Are we not entitled to expect enhanced, more efficient health services, not just services cobbled together to match the particular budgetary pressures at the time?
	On 6 April 2005, the Prime Minister said from the Dispatch Box:
	"It is correct that we raised national insurance to pay for extra investment in the national health service."—[ Official Report, 6 April 2005; Vol. 432, c. 1409.]
	My constituents have paid the extra tax, but where is the money going? All they are seeing is cuts. Yes, they are getting vague promises from local health chiefs about better provision being on the way, and that health care will be provided in a different way in future. Well, we will believe it when we see it. If there is a better way to treat patients, why was not that way pursued before? Why does it take budgetary pressure to force decision-makers to follow the correct clinical path?
	Who is to blame? It is an interesting question. No doubt the Government have increased funding, but have they increased their requirements from trusts to the extent that the extra money has been swallowed up in extra costs? Or have the local health chiefs mismanaged the extra expenditure? I would like the Minister to give me her view of Gloucestershire, because I do not necessarily blame the Government. I want to explore tonight exactly where the fault lies. Who is to blame for the deficits? What is the Minister's view? How do we sort the deficits out? It could be done by closing front-line services and making patients suffer, but it could also be done more sensibly, given a little more time.
	The question that I would most like the Minister to answer—it is a crucial question that has been raised before—is about the balancing of the budget. The local trusts claim that they have to balance their books for the whole of this financial year, including making up historic deficits within this financial year. I quote from their consultation document published just today:
	"PCTs have to achieve in-year balance and recover 2005-6 deficits".
	They say that they have been told, unequivocally, that they have to do that. They told hon. Members that that was the case just last Friday. However, the Secretary of State, in a letter to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), said that trusts would be expected to make improvements this year and achieve month-by-month balance by the end of the financial year. That is quite a different thing.
	In a statement last week, the Secretary of State said again:
	"We are aiming for all organisations with deficits to reach monthly balance of income and expenditure by the beginning of April next year."
	She went on to say that in some cases, the worst ones will be allowed even more leniency. Who is right? Do the trusts have to achieve total balance for the year, including historic deficits, or do they have to achieve monthly balance by the end of this year? Because if the Secretary of State is right, the consultation paper in Gloucestershire has been launched on a false, even dishonest, premise.

Martin Horwood: Does the hon. Gentleman agree that there is added nonsense in the concept of repayment in that particular case, of which the Minister may not be aware? For Cheltenham and Tewkesbury PCT to ask for the money to be repaidto it by Cotswold and Vale is a nonsense, because the two will merge in any case. So the money lost to Cheltenham and Tewkesbury will never be repaid.

David Drew: I congratulate the hon. Member for Tewkesbury(Mr. Robertson) on initiating the debate. This is the fourth such debate in which I have taken part over the last month: two of them were about health in Gloucestershire, the others were about maternity provision and community hospitals, which relate directly to my area, where I face the prospect of losing both.
	Like the hon. Member for Cotswold (Mr. Clifton-Brown), I took part in the rally in Stroud on Saturday I mentioned to the Minister before we came into the Chamber. It is estimated that about 4,000 people were at the rally, at which both the hon. Member for Cotswold and I were able to speak. There was immense feeling about the proposals and I said that I would echo it in the Chamber—it could certainly have been heard at Westminster.
	Earlier today, I took part in a meeting of the overview and scrutiny committee organised by the county council, which included representatives from the district councils. I have come straight from that meeting, which is why my brow is more furrowed than normal, and I want to raise with the Minister some points about the consultation on partnership trusts. As the hon. Member for Tewkesbury said, although we managed to extend the PCT consultation so that it takes place over 12 weeks, the consultation period for the partnership trusts—the mental health and learning disability trusts in Gloucestershire—will finish on23 June, which is a mere five weeks. Without putting words into the mouth of the overview and scrutiny committee, it is fair to say that it is looking carefully into the discontinuity between the PCT consultation, which has yet to start formally, and the consultation on partnership trusts, which has reached the mid-way point, if not the final stage. I hope that the Minister will comment on that, as the situation does not make much sense; another £12 million has yet to be found from the PCTs and, given what they could later demand, that could have an enormous impact on the partnership trusts.

David Drew: I agree and make no apology for concentrating on that point, because that is the most urgent consultation. On Saturday, the hon. Gentleman heard a lady make a most emotional speech about the implication of the proposals for her nearest and dearest. People feel very let down because they have been given almost no time or opportunity to make their case.
	The Chamber heard the request of the hon. Member for Tewkesbury that the Minister clarify whether we are talking about a month-on-month balance or historical deficits that have to be cleared in a matter of months. We need an explanation, because that is the nub of the problem we face in Gloucestershire.
	There is a second problem and I make no apology for continuing to labour the point, because it is important: the relationship between Gloucestershire and its partners in the SHA. It is hardly acerbic to note that Gloucestershire feels let down by the fact that it happens to be in a strategic health authority, other parts of which have run up large deficits over a period of time. The hon. Member for Tewkesbury made several points about why that should not have been allowed to happen, but it has been allowed to happen. As a result, according to the operating framework that the SHA is passing down on tablets of stone, Avon, Gloucestershire and Wiltshire SHA is being asked to reduce its turnover by 5.3 per cent., against a national average of 3.4 per cent. That may not sound much, but there is still a problem. Some trusts in Gloucestershire have been in balance or close to balance, although it is true that Cotswold and Vale PCT, which is my PCT and that of the hon. Member for Cotswold, has been a problem for a long time, but that problem does not extend to other parts of the SHA. We are being asked to provide ballast across an area for considerable problems in the past. We know that, because about £175 million from the NHS bank has gone elsewhere into other parts of the SHA, not a penny of which was ever put into Gloucestershire, even though Cotswold and Vale has had its own problems. I ask the Minister for a commitment that we shall get some real figures—disaggregation of the figures—for the entire SHA, even in breaking it down within primary care trusts so that we know where the money has been spent as well as where the cuts are being levelled. It is vital that we know where the real money has gone and how that money can be accounted for.
	I have one request from the overview and scrutiny committee, which I will put to the Minister. It wrote some seven weeks ago to the Secretary of State seeking clarification on budgetary issues. That was mainly in terms of the month-on-month balance. It has yet to receive a response from the Secretary of State. The committee seeks clarity and it wants to see the Secretary of State. I pass on to my hon. Friend the Minister that urgent request. The committee is now mid-way through the first of its consultations. Yet it could be labouring under a great misapprehension, as the hon. Member for Cotswold rightly said. The committee could be being asked to make a decision on something that is a false premise. There should be quick clarification.
	I will concentrate rather more on the partnership trust, the mental health and learning disability trust in Gloucestershire, which is mid-way through its existing consultation. What is the trust being asked to save? I have already said that the national average is 3.4 per cent. in turnover. The SHA is asking us to save 5.3 per cent. in turnover. The partnership trust is being asked to save 12.8 per cent., which is £9.6 million, of its planned expenditure. I do not know whether that means one and the same as turnover. However, I take it to be that an even greater amount of savings is required of the partnership trust than anything else that is being required within Gloucestershire, and maybe within the entire SHA.
	As the hon. Member for Cotswold said clearly, about 36 per cent. of older people's services for mental health and learning disabilities are to be cut. That is a huge reduction in expenditure. It is all driven by the mad idea that we have to come into balance. I do not know where the figures come from for the partnership trust. That is given the historic overspend, which I did not know was there until suddenly it appeared, and the deficit that is coming this year. I do know where the £2.2 million comes from, which is the contribution to the NHS recovery programme. That seems so unfair given the other cuts that have to be made.
	It would help me and other Gloucestershire Members who are in their places this evening to know exactly where the figures come from and why a small trust—a specialist trust—is being asked to make a disproportionate contribution in trying to come back into balance. This makes a big difference to my constituency because of the potential changes at Weavers Croft. It is not likely that Weavers Croft will close completely but it will lose its beds. We do not know the impact of the beds that were brought across from Bourton ward in Cirencester, in the constituency of the hon. Member for Cotswold. As far as I know, that has never been evaluated given the impact that that had when we had some 120 beds for older people's services. We now intend to cut the number to 65 if the proposals are adhered to.
	I move on to the Tyndale centre in Dursley in my constituency, where we have already lost day centre provision. That has been lost also at Weavers Croft. There must be questions about whether those facilities will ever be picked up and from where they will be run. As was rightly said by the hon. Member for Tewkesbury, we must focus on the impact, which will be dramatic on social services. I heard the social services committee make a presentation to the overview and scrutiny committee. I was not clear whether anyone has undertaken a detailed impact analysis of the changes that are being proposed. If that has not been undertaken, somebody should see that it is. In this place, we would never allow the nature of proposals to be given superficial treatment, which is what they appear to be receiving. That is not a criticism of the overview and scrutiny committee because it is saying that it has unclear and scanty information about the different proposals.
	The organisations in the voluntary sector need to be brought into the process. Underneath the radar, as well as the institutions that are much loved and being fought over, many other changes are being proposed. For example, it is proposed that there should be a50 per cent. further cut in the passenger transport service. In Gloucestershire, if someone does not have a car they have no quality of life. If someone does not have a car and he or she is ill, it is unclear how they can get to the necessary services. The local newspaper—I refer again to the lady who spoke on Saturday—ran a particular campaign to try to get her to Cheltenham. Visiting took two hours and the situation was difficult for her. Is that something that people can and should be asked to do?
	I could go on much longer about the impact on maternity provision. There will be future debates in this place and I have no doubt that, if we do not get satisfaction, we shall go on to examine some of the other service provision, such as the community hospital closure programme, including the Berkeley hospital, which will not save any money because the idea is to move Berkeley up to the Cam and Dursley area. In some instances that makes sense because that it where the larger population is. However, I am not in the mood to agree to a cut in provision when we have no money, apparently, to re-provide a better service anywhere. It would be daft for any Member to say, "I can see that that will be a good move." We are being asked to make dramatic cuts without any possibility of new investment coming into the county. It would be ludicrous to go along with the proposal unless we have some clarity on what needs to be done.
	I ask my hon. Friend the Minister to provide clarity so that we can nail tonight what we mean by coming into balance. We must examine the particular problems of the strategic health authority. These are matters that are serious to Gloucestershire. We feel unfairly treated because of the nature of the SHA with which we unfortunately happen be placed. We need clarity also about the series of consultations that are being held so that we understand more about the impact analysis. That is clearly not happening at present. That is all to do with the speed at which the changes are being driven through. The direction may be right, but we need to separate the direction from the financial imposition. We certainly need to separate it from the speed at which people are being asked to make drastic decisions that have an impact on the young and the old and everyone else who is either a carer or someone who really cares for the facilities in question.
	I hope that my hon. Friend the Minister has listened to these difficulties. She will hear about them from hon. Members on both sides of the House. I hope that she will realise also that this is not a party political issue. All the parties are united in Gloucestershire. We need some help, otherwise we will see services lost that have been in place for a generation and more, and for no purpose whatsoever.

Martin Horwood: I congratulate my hon. Friend the Member for Tewkesbury(Mr. Robertson) on securing this important debate. As my parliamentary neighbour, the hon. Member for Stroud (Mr. Drew) has said, there is all-party agreement and all-party concern among the people of Gloucestershire about the effect that this financial crisis is having on us. I must declare an interest, in that my wife works for Cheltenham and Gloucester primary care trust. Her job is at risk along with everyone else's. I am certainly not pleading on her behalf this evening.
	Why are we here? Are we here to complain about less money for healthier, wealthier areas? No, I am not. I accept the principle that health service funds have to be targeted and that that may mean that areas such as Gloucestershire receive less funds per capita under some circumstances than areas of greater overall deprivation. However, one of the problems with the cuts and the savings proposals that are being imposed on Gloucestershire is that even in towns that may be prosperous as a whole, such as Cheltenham, there are areas of deprivation. It is the most vulnerable and poorest people in those towns who are being hit hardest, because they are the people without transport. They are the people who find it difficult to access services in other towns.
	Are we here to blame local NHS managers? That is what the Under-Secretary of State for Culture, Media and Sport, the hon. Member for Tottenham(Mr. Lammy), said on "Newsnight" last week. He was asked whether local NHS managers were to blame and he said, "Yes." But surely that cannot be true. As neighbouring Members have said, in Cheltenham and Tewkesbury in particular, we have a partnership trust with three stars that was about to be in the first wave of foundation trusts; Gloucestershire Hospitals NHS Trust, which is a low-cost provider of health care by national standards and is very efficient; and, above all, Cheltenham and Tewkesbury primary care trust, which has never been in deficit and this year posted a£1.2 million surplus. Our NHS managers have done everything right. They have done everything that the Government asked of them. The primary care trust was described in  The Daily Telegraph, which I do not often read, but which I am sympathetic to today—as arguably "the perfect PCT" that has done everything that the Government asked.
	Are we discussing how patient care is improving everywhere, as the Secretary of State told the House last week? Well, no, that cannot be true either, although I will prevent the Minister from having to recite the usual things about additional investment in the NHS by saying that I am pleased that there has been additional investment in the NHS. I recognise that,and my party welcomed and supported additional investment in the NHS. We acknowledge the real improvements in health services that have taken place, including the reduction in waiting lists. However, that is not the issue today. The way in which the Government have gone about delivering that spending has led to breathtaking inconsistencies and results that I am sure that they did not intend, but which are proving devastating for our local NHS. We have overspending on things such as the GP contract, the consultant contract and the new out-of-hours service, and even on worthy initiatives such as NHS Direct, which I understand has gone massively over budget.
	We have the nonsense of consultants being flown in to Cheltenham general hospital from Germany and France to meet Government waiting list targets at enormous expense at a time when we are facing cuts in front-line services. Initiative after initiative and target after target are being imposed on local managers to the point where it is impossible for people to keep track. Let us think about the simultaneous initiatives that are going on at the moment: payment by results, patient choice, agenda for change, practice-based commissioning, the change to the trusts' funding tariff, the change to funding NHS dentistry, the reorganisation of the strategic health authorities, and the reorganisation of the primary care trusts, which means that the very managers who are supposed to be coping with all this change and coping with the cuts in front-line services are in the process of having to be made redundant and applying for new jobs themselves. It is little surprise that the overall sense is of panic and confusion and that, as the hon. Member for Stroud pointed out, there is a real misunderstanding of exactly which numbers are which and whether savings have to be made month by month, or whether we are talking about clearing all the financial deficits in one year, which is the line that has been fed down to local managers, as they understand it.
	Then we have the political decision—in effect, the political decision that the deficits, however they have arisen and whoever's fault they are, have to be cleared in one year and have to be funded not from other areas of Government spending, but from the successful areas of the NHS such as ours. There is no law that says that the NHS has to live within its means in any particular budget year. Once the deficits have arisen, it is a political decision as to how unsuccessful areas are bailed out. If one wants to be brutal and insist that they live within their means and make up the whole deficit in one year themselves, that is one argument, but that is not what the Government are saying. The Government are saying, "Well, actually, we will bail them out. They don't have to live within their means this year." Where one bails them out from is the political decision. The Government are saying, "We won't bail them out from ID cards or from troop commitments in Iraq or any number of other areas of Government. We will bail them out from the most successful areas of the NHS such as Cheltenham and Tewkesbury."
	What result does that have for the perfect PCT that has done everything right? On 28 March, 27 Gloucestershire health community savings proposals were announced. I am afraid that no clinical justification was given with them. Of those proposals, 22 are about front-line care. For Cheltenham and Tewkesbury, this means that we have faced a triple whammy. First, our primary care trust economised and tried to live within its means—despite less funding for being a healthier, wealthier area. It made economies and did not launch initiatives that it could not afford. So we lost out there. Secondly, there is top-slicing, which the hon. Member for Stroud has talked about. Finally, we are losing services that we simply share with primary care trusts such as Cotswold and Vale, because they are our neighbours and, overall, we have to make savings on the basis of what has now been invented as the Gloucestershire health community. The promise that I was given about a year ago that the savings and the financial recovery plans would apply only in their own geographical areas has gone by the wayside.

Martin Horwood: I entirely agree with that. In fact, the atmosphere in which things are being done is so febrile that, at a recent meeting where all the county's MPs met the chief executives of the trusts, I asked about the impact of having to take more time—quite properly—over consultation. The impact was another £1 million of savings that they were told to find. The manager who replied to the question said that they did not think that even the existing savings proposals would make up the amount that they were being asked to save by the strategic health authority and, above it, the Department of Health. The atmosphere of financial crisis is all-pervasive. The numbers vary. I managed to find a total of £29 million, but the hon. Gentleman has mentioned figures in excess of £30 million.
	I am afraid that the result is not, as the Secretary of State believes, patient care improving everywhere. Instead, there are real impacts on front-line care.St. Paul's maternity wing is a first class maternity ward that is just 10 years old. We celebrate its 10th birthday party this Wednesday. It is in Sandford park at12 o'clock if the Minister cares to come along. She might find a rather hostile reception. I was born in its predecessor hospital. We have had that service in Cheltenham since the 1940s—long before this Government were elected. My children were both born in the ward. It delivers 2,600 babies a year and serves a town with a population of 110,000 people. It draws in mothers who wish to give birth there from as far afield as Banbury, Malvern and Evesham, and even from beyond Gloucester in the Forest of Dean. One might arguably say that if one maternity ward were to close it might be Gloucester's rather than Cheltenham's, since Cheltenham's seems to be rather more popular. However, I would not want to encourage recent accusations of snobbery in that respect. The most important thing is that Cheltenham women want to give birth in Cheltenham.
	A patient safety argument has been made in favour of the proposal—rather after the event since it came up as a savings proposals. It is argued that bigger and better maternity wards are always safer. That might be true, but in the end that is an argument for the entire country going to St. Mary's in Paddington for their delivery. There is always a balance of risk to be struck. In a meeting today, midwives put to me the risk posed by combining dual centres into one centre. That makes the maternity ward more vulnerable to infections such as clostridium difficile and the much more widely known MRSA. The whole trend of obstetrics and midwifery recently has been away from big hospitalised units towards smaller, friendly units, and away from treating maternity as a sickness and towards regarding it as a healthy, normal process.

Geoffrey Clifton-Brown: Yes; the situation will be even worse than the one I have described if babies are born in cars, rather than in clinical conditions in ambulances, as a result of the changes.
	Young mothers will have to travel further not only to attend the maternity unit, but to access pre-natal and post-natal care, which is a point that also applies to visits to young mothers who stay in hospital. It is difficult for hon. Members who represent urban areas to understand that public transport in areas such as the north Cotswolds is almost non-existent. It is difficult for someone who is about to have a baby and who may have other children with them to catch a bus from the north Cotswolds to Cheltenham and to change buses in Cheltenham to go on to Gloucester. People who are sitting in offices trying to plan larger and, in their view, better units sometimes fail to take into account the extreme difficulties of people who must travel to those hospitals, particularly when they do not have cars and live in rural areas. My PCT has estimated that every year patients in Gloucestershire travel 1 million miles to out-patient appointments. We are all concerned about global warming, and such distances seem distinctly unsustainable.
	One other aspect of the matter has not been emphasised sufficiently in debate this evening. At Friday's meeting with health chiefs, it was made clear that those people who are referred to the larger units in the acute hospitals in Cheltenham and Gloucester will be discharged more quickly, which means that they will require greater care. In the announcement several Wednesday's ago, however, we were told that community nurses, health visitors, physiotherapists and other at-home services would also be curtailed. We have got a lot of vacancies for community visitors in the north Cotswolds, and I think that when some people are discharged from hospital it will be impossible to deliver their home help care package, which will cause them hardship. I ask the Minister to consider that point carefully.
	I do not think that social services have been sufficiently involved in the discussions. As my hon. Friendthe Member for Tewkesbury has said, the effect of the changes on other agencies has not been costed. As the hon. Member for Stroud has mentioned, a lot of voluntary transport activity goes on in my constituency. If patients are going to be discharged from hospital more quickly, they may be distressed and more difficult to transport. As we are finding from our constituency postbags, some of the people who have been discharged from hospital are not suitable for home care. That means that they must be readmitted, which is, again, an extra cost.

Caroline Flint: I thank the hon. Gentleman for that constructive contribution. I have met representatives of the strategic health authority and the primary care trusts. I hope that it is generally agreed that we cannot manage the health service from the centre, because the needs of one area are different from those of another and are affected by factors such as health challenge and geography. The decisions are best made locally.
	Perhaps some decisions should have been made previously, but people did not make them. They thought, "We don't need to face up to that difficult decision. We'll leave it for a couple more years. We've got some more funding coming from the Government. We've gone from £30 billion to £60 billion, and to£90 billion for the NHS in the next few years." The last sentence is the only mantra that I shall recite in the debate but it is true, and worth saying. People may have put off making decisions, but when somebody says, "Hang on, we've got sort out these finances, because you can't carry on like this," perhaps they will suddenly start to take notice. I am sure that the hon. Gentleman and others will make those points locally. I am sure that they will be raised with existing personnel and in the context of future reorganisation of PCTs. Managing the current position and, as the hon. Member for Cotswold (Mr. Clifton-Brown) said, ways in which to ensure that it does not happen again, will be considered. That is the Government's ambition. We would be a foolish Government if we wanted to revert to the problems again and again.
	That is why we believe that, difficult though it is and unpopular though it may be in some quarters, we must grab the agenda and deal with the problem—because it is clear from examining the information on some of the trusts that have got into deficit that unless the problem is tackled firmly, they do not get out of it, and it gets worse.

Caroline Flint: I cannot be clearer than I already have been. I do understand the hon. Gentleman's point. However, we also have to work within a wider health economy than just one trust. People in Doncaster, for example, go to Sheffield for cancer treatment and to other parts of South Yorkshire for different services. Other people come to Doncaster from elsewhere for services. That is how the health community in which we live operates. We want access to the very best health care in some of the most challenging and demanding areas of health. That is something that we all sign up to. That is why we have to get this right, and why we have a responsibility to support each other within our local health economies. That is not letting anyone off the hook. That is what happened in the past and it was part of the problem.
	It is all about changes for the future. The amount of money going into the areas of hon. Members who have spoken in this evening's debate is substantial. There is no question that more money has been invested in the NHS. In all the constituencies of hon. Members in their places tonight, people have benefited from greater access to treatment faster than ever before. The minimum standards applied to our targets will continue to apply in the future, but to get to a place where we can think more creatively about provision of the services that we more or less all want, we have to deal with these financial problems and there is no easy route to achieve that.
	I want to highlight a few points about how health is changing. In the Gloucestershire area, more people are admitted to hospital than the national average and more people are spending longer there. I acknowledge the point of the hon. Member for Cotswold(Mr. Clifton-Brown) when he said, "Hang on a second—we should not be kicking people out of hospital who need to be there." Of course not. I have to say that I have heard some worrying stories of older people being kept in beds on hospital wards in unsuitable circumstances when they really would be better looked after elsewhere. I accept that it can be an issue around partnership with social services and it is sometimes the result of a baffling lack of co-ordination with respect to the particular problems.
	Let me provide one example relating to another part of the country. Someone was receiving acute care in an acute hospital for his condition and was then transferred to a bed in a smaller community hospital. Why could he not come out of that community hospital? Partly because he had been diagnosed with diabetes and an at-home service for insulin care and management could not be provided. In that context, discussions about support for that individual included the point that choices had to be made about whether to provide the relatively straightforward services that were needed in that gentleman's home in the community or whether he should spend four months in hospital until something was sorted out. There are legitimate debates about that choice.
	About 70 per cent. of people now have surgery as day-care patients, which is a huge change from the past. Nationally, the number of NHS beds has fallen by more than 30 per cent. over the past 20 years, while the number of NHS out-patients has risen by almost 60 per cent. That has changed over the decades, not just in the last few years. Of course, there are new technologies, better drugs, advanced surgical techniques and improved management practices— [Interruption.] The hon. Member for Cheltenham (Martin Horwood) keeps making comments from a sedentary position, but every time he raises questions about new drugs and other choices, it goes to the heart of the issue of trying to provide a health service that can meet people's needs, but needs to be managed locally.

Caroline Flint: No, I am not giving way again. I have already given way several times to the hon. Gentleman and responded even to his sedentary comments.
	The hon. Member for Tewkesbury raised some specific questions about Winchcombe hospital. I understand that, as part of the consultation, it is planned to enhance services at the Tewkesbury hospital, invest in community services and provide more rehabilitation and support in the home. The consultation will be for 12 weeks and he will be able to explore how that will happen—a pertinent question for the consultation.
	I understand that some of the Winchcombe hospital's problems relate to the building and that maintenance costs are £500,000 a year. The point was raised whether the hospital could be refurbished and used for other services, but it is felt that the fabric of the building is too old, so it would not be cost-effective to do so.
	I understand that out-patient and therapy services will be relocated and that, working in partnership, another eight beds will be provided elsewhere for rehab and palliative care. Clearly, those issues will be discussed as part of the consultation exercise. Certainly, in a number of areas, including Gloucestershire, as with other parts of the country, there are options that seek to enhance and improve some of the other community hospitals or services. I understand that one of the options for Dursley is to build a new health and social care facility in partnership with an independent sector provider.
	The hon. Member for Cotswold made a point about possible partnerships at Fairford hospital. It is difficult for me to comment to on that, but, clearly, he could have a conversation with PCTs and SHAs about any possible partnership development. Although the number of beds has been reduced at one facility—I think it was Tetbury hospital, which is an independent not-for-profit hospital; I look to the hon. Gentleman for reassurance and see that he is nodding—I understand that there is a discussion about how that service provider could provide more support and care in people's homes, rather than in hospital, and that it is keen to explore those opportunities.
	I will come to the financial balance, but I want to say something about maternity hospital services—an issue that has been raised by several hon. Members this evening. I have glanced at the report in  The Citizen local paper. Clearly, there was a well-attended rally on the issue at the weekend. As hon. Members will be aware, the proposal is that, over the next three years, all in-patient births at Stroud maternity hospital will move to Gloucester. I understand that there are just under 6,000 births in the Gloucester area, which services Cheltenham, Gloucester and Stroud, of which about 3,600 take place at Stroud hospital. Again, I am sure that that issue will be discussed as part of the consultation exercise, but that is quite a small number, and the birth rate is dropping, too.
	Clearly, considering what services need to be provided is an issue. This might not meet everyone's concerns, but I noticed in the article in  The Citizen that one lady was talking about the fantastic service that she received in having a midwife-led home birth. That service will continue, including, I understand, both antenatal and postnatal support. The difference is—I am not going to cover it up, because it is in the consultation—that in-hospital births at Stroud will be moved to Gloucester. However, I want to put on the record that antenatal and postnatal services and the opportunity for those women who want to have a midwife-led home birth will still be available to women in Stroud and the surrounding area.
	Again, this is a difficult issue. I have looked at the figures: women are having children older, which presents some issues. Women who have IVF treatment are more likely to have multiple births. Other issues need to be considered when providing consultant-led maternity services, particularly working times and the hours worked by consultants, as well as other health professionals. Again, those are factors in the provision of services. There are clearly financial considerations, as in everything, but there are some real issues about providing the best service possible, particularly to those most in need of that specialist service. Several Members have made points about the arrangements for getting to hospital in time, and there is no easy answer. Planning in relation to antenatal services is part of that process, and women and their partners and families need to be aware of what services are available and what arrangements they might need to make in such circumstances. Although I was in hospital for four days when I had my first child, times have changed, and for a straightforward birth, most people are in and out of hospital that day. Everyone wants to be there in the first few hours—I am not trying to mitigate that—but, for most people, days do not have to be extended for visits to their daughter or sister and her new child.
	On mental health, my hon. Friend the Member for Stroud (Mr. Drew) referred to the percentage contribution being asked from mental health services, which I will draw to the attention of the Minister of State, my hon. Friend the Member for Doncaster, Central (Ms Winterton), who has been monitoring how mental health services are being affected, the proportions involved and what the safeguards should be.
	All Members who have contributed to the debate this evening referred to the financial balance. As they will be aware, strategic health authorities are responsible for the performance management of their NHS organisation and for ensuring that they achieve financial balance. The aim is for the NHS as a whole to have returned to financial balance by the end of 2006-07. As I mentioned this evening and in a previous debate with my hon. Friend the Member for Gloucester (Mr. Dhanda), who asked similar questions, within an overall NHS balance position, a minority of NHS organisations might be unable to achieve a balance position within the time frame. However, all organisations that overspend will be expected to show an improvement during 2006-07. By the end of the year, every organisation should have monthly income covering monthly expenditure or a date by which that will be achieved in 2007-08. Strategic health authorities take a reserve at the start of the year, mainly from PCTs, and will not redistribute resources to overspending organisations but will allow them to return to financial balance across the patch with any deficits offset by the reserve held by the SHA. Reserves will have to be paid back to organisations in future years when the organisations currently in deficit start producing surpluses.
	The key benefit of the new system is that it provides financial certainty as reserves will be lodged from the start of the year. That means that SHAs will not need to spend time and energy later in the year trying to persuade organisations to underspend and produce a surplus. Despite the difficulties, that has tended to be the way that it has worked—people have planned for a year and then been asked to pull back later in relation to the year ahead. Trevor Jones, chief executive of Avon, Gloucestershire and Wiltshire SHA, said in his letter of 7 June that there is
	"a clear requirement for NHS bodies to achieve in-year balance and to recover 2005/06 deficits...In exceptional circumstances, organisations formally included in the Department of Health's 'turnaround programme' may be allowed more time to recover the 2005/06 deficit. In Gloucestershire, only Cotswold and Vale PCT is receiving turnaround support and it will receive £6.8m from the PCT pool in 2005/06 which must be repaid in later years."
	That is saying that organisations must show that they are in balance in terms of their monthly income and expenditure, but that the pool provided allows the SHA to show that the whole local health economy is in balance against the deficits. That recognises that recovering some deficits might take more time in certain areas.
	That issue will have to be explored locally, but it must also be recognised that the recovery of deficits cannot keep being put off until tomorrow. That is why consultation, not just about finance but about creating a health service that is better for the future, is so important. We need systems that will improve outcomes, but will also put the service on track to achieve a meaningful financial balance that is not just secured through the reserve produced by the strategic health authority.

Caroline Flint: I will give way to my hon. Friend the Member for Stroud (Mr. Drew) first. Then I will give way to the hon. Member for Tewkesbury, as he initiated the debate.

Caroline Flint: I understand that it is in terms of income and expenditure, but there is also the issue around the outstanding deficits that organisations have. Those have to be dealt with too. Part of the top-slicing that is happening in those parts of the health sector or health trust that are in balance is to try to ensure that there is, if you like, shared responsibility for maintaining health across communities, to follow up on the point that my hon. Friend the Member for Stroud made about what is being asked of different parts of the health service in his strategic health authority area to deal with particular problems and issues.
	That still requires an openness to debate some issues that involve some hard decisions and hard choices about the services that are necessary for the future. It raises issues around engaging the public. Importantly, as I said earlier, it involves having a discussion about what sort of services people want but also, in order to get those services, what is necessary. It is undoubtedly the case that, with the best will in the world, for some of our most advanced services to get the personnel to provide the best techniques in certain areas of health in our hospitals, some consolidation is necessary.
	It is also clear that, particularly in respect of older people, we have to address some legacy issues of community hospitals, which were created with the best intentions, and to consider whether they can meet the needs of the future. I raise another issue in relation to health staff. Talking to a nurse the other week, I found that one of the problems has been that, in some of our community hospitals—as I say, I do not know enough about all the individual community hospitals in hon. Members' areas—the sort of service that they are offering, which is at its best a holding bed for older people, is not providing training and other opportunities for staff who want to work in this sector, particularly those who want to work closer to where people live in the community, providing a 24/7 district nurse service, for example, for people who most of the time do not need to go into hospital. They could get the services they need at home, with little disturbance to their life and none of the problems about relatives having to try to visit them and all those other things.
	We have had an interesting debate. I hope that we have explored, possibly in a wider way, some of the challenges that face the health service. It is about value for money but importantly it is also about dealing with a problem which has been happening for many years in respect of the way in which health has been funded. It is also about dealing with perhaps some decisions that should have been made earlier about the sort of health service we want, which as I said is about prevention and support as well as treatment. However, to get to the place where we can have that discussion and start thinking about a 21st-century health service, undoubtedly, these problems have to be resolved financially but also in terms of the organisation of services.
	 Question put and agreed to.
	 Adjourned accordingly at three minutes pastNine o'clock.